Overbooking can be a cost-effective strategy if implemented correctly. Let’s look at a few tips to make sure you get the most out of this approach.
What is a hotel overbooking strategy?
The hotel overbooking strategy is a revenue management technique that hotels use to maximise occupancy and revenue. By deploying this strategy a hotel is insuring itself against possible cancellations by having secured guests who can fill cancelled bookings.
channel manager, booking engine, property management system and website analytics. Don’t forget to monitor external market sentiments such as cancellation of an event or reduction in connectivity to your destination – these could all result in cancellations. You can also use data automation tools to combine multiple data sources and form one view for a more robust analysis.
3) Pre-arrival upselling can beef up your overbooking strategy and make it more profitable. During this stage of the guest journey, guests are likely to be more open to personalising their stay. This means that when suggested during the pre-arrival stage, there’s a greater chance that you’ll sell room upgrades with a small discount.
. How the guests being turned away are managed is very important to maintain your brand. Your staff plays an important role here. Train staff on how to communicate professionally, suggest alternative accommodation (and organise transport, if needed), and offer relevant compensation. To ensure that staff know what to do and that each situation gets handled consistently, it’s a good idea also to have a guest recovery plan in writing.
7) Have a clear compensation plan that your staff can follow when handling overbookings. Don’t rustle up a plan last minute or have ad hoc overbooking management – these are a recipe for disaster.
To conclude
Hotel rooms make up a hotel’s main inventory. As such, you’ll want to do everything possible to work in a smart way, which includes using overbooking practices carefully. While it does involve some risk, it’s a cost-effective strategy that can help with revenue management in the long run. Plus, not only do empty rooms mean that a hotel business can’t generate revenue via bookings, but it also deprives it of the chance to generate extra revenue via upselling.
7 tips to make your overbooking strategy a success in 2024 was last modified: February 7th, 2024 by